Constituting 97% of all businesses and providing 67% of employment across the region, SMEs form the backbone of ASEAN’s economic fabric. As Artificial Intelligence (AI) reshapes industries at an unprecedented pace, the imperative for these enterprises to build AI capabilities has become both urgent and existential. While AI adoption is accelerating, with seven in ten people in the region now using generative AI tools weekly and projections suggesting a US$270 billion boost to the regional economy, the benefits remain unevenly distributed. A critical gap persists: 79% of workers using AI are self-taught, and one in two non-adopting SMEs cite a lack of skills as their primary barrier to entry.

The stakes are particularly high, as the skills required for jobs across the region are projected to shift by 72% by 2030, posing a monumental transition challenge for businesses with limited resources and training infrastructure. At the same time, SMEs recognise the value of AI, with more than three-quarters already utilising AI-enabled digital platform tools and 73% viewing these tools as a means to level the competitive playing field.

Bridging the gap between demand and structured support becomes a defining policy challenge for the region. Recognising this, the Tech for Good Institute (TFGI) and ASEAN-BAC Philippines convened a high-level virtual focus group discussion (FGD) called “AI Skilling Opportunities for SMEs” on 13 April 2026. The discussion brought together a diverse group of stakeholders to explore the pressing challenges and vast opportunities in AI skilling for ASEAN’s SMEs.

Moderator and Scene-setter

• Fairoz Ahmad, Moderator, Tech for Good Institute (TFGI) (Moderator)
• Citra Nasruddin, Director, Tech for Good Institute (TFGI) (Speaker)
• Erlanggasakti Ubaszti Putra, Researcher, Tech for Good Institute (TFGI) (Scene-setter)

Panellists

• Josephine Romero, Chair, ASEAN-BAC Philippines
• Patrick Chua, Council Member, ASEAN-BAC Philippines
• Rifki Weno, Executive Director, ASEAN-BAC
• Mark Philip “Mack” Comandante, President, Global AI Council Philippines
• Gil L. Gonzales, Council Member, ASEAN-BAC Philippines
• Oknha Lim Socheat, Council Member, ASEAN-BAC Cambodia
• Hans Lukiman, Council Member, ASEAN-BAC Indonesia
• Alliza Rebosa, Program Manager, Center for International Private Enterprise (CIPE)
• Alfee Galapon, Director, Bureau of Small and Medium Enterprise Development (BSMED), DTI
• Datuk Shireen Ann Zaharah Muhiudeen, Council Member, ASEAN-BAC Malaysia
• Michelle Chandra Kasih, Researcher, Economic Research Institute for ASEAN and East Asia (ERIA)
• Thanousone Phonamat, Representative, Lao National Chamber of Commerce and Industry (LNCCI)
• Bombarda, Representative, ASEAN-BAC Philippines

Key Takeaways

1. Defining AI Skills: A Fragmented Starting Point

Participants examined how the concept of “AI skills” is understood across ASEAN member states, noting considerable variation in definitions and expectations. The discussion highlighted a spectrum ranging from basic tool usage to more advanced competencies in governance and strategic integration, with most SMEs currently positioned at the foundational end. Differences in readiness across sectors, enterprise sizes, and geographies were also explored, alongside human-centred barriers that compound technical gaps. Human barriers identified include the dominance of English and Western-centric knowledge being used to train LLM models, pedagogical weaknesses that hinder the learning of AI tools effectively, and concerns over handling of business data.

2. What Works: Conditions for Effective AI Skilling

The session explored existing AI skilling initiatives across the region, with participants sharing examples of programmes that have gained traction. Common success factors included localisation, practical and modular delivery, peer-to-peer mentorship, and integration with broader digital infrastructure and connectivity efforts. Participants also flagged the risks associated with commercially driven training filling gaps left by the public sector, underscoring the importance of vendor-agnostic approaches to skills development.

3. Leveraging Regional Frameworks to Scale

A significant portion of the discussion centred on how regional mechanisms, particularly the ASEAN Digital Economy Framework Agreement (DEFA), could be leveraged to scale AI skilling efforts. Participants discussed proposals on cross-border credential recognition, shared digital skilling platforms, and talent mobility frameworks. The Philippines’ 2026 ASEAN chairmanship was noted as a timely opportunity to advance several of these proposals at the regional level.

4. The Role of Public-Private Collaboration and Trust

Participants discussed the evolving role of the private sector in AI skilling, emphasising that its greatest contribution lies in helping SMEs apply AI in real-world business contexts, rather than in promoting technology alone. The conversation also touched on the importance of trust in both AI tools and the broader regulatory environment as a prerequisite for sustainable adoption. Strengthening data protection frameworks, improving AI transparency, and proactively addressing public concerns around job displacement were identified as key areas requiring coordinated attention.

The insights gathered from this focus group discussion will inform aTFGI policy paper on AI skilling for SMEs in the region. This will contribute to regional discourse under the Philippines’ ASEAN chairmanship in 2026 and support the shared objective of building an inclusive, AI-ready SME ecosystem across the region.